Regulators and businesses operate as frenemies, said SEBI's Whole-time Member Ashwani Bhatia.
The relationship between the two is characterised by cooperation and conflict, he added.
Bhatia was speaking at the Corporate Governance Summit on November 12, and on the topic "Regulators--Friends, Foes or Frenemies".
He said, "We will be your friends most of the time. However, as new market dynamics emerge, we will create new regulatory frameworks or modify existing frameworks as required to fulfil our role of investor protection that relies heavily on the impartial and efficient performance of companies, their boards and market participants."
Bhatia cited numbers to show how the capital markets have grown over the last decade and to emphasise the need to protect the trust investors have placed in the market.
Over the last 10 years, since 2014, he said, "The market capitalization of all listed stocks has surged six times to around Rs. 425 lakh crores today. The number of demat accounts, which hold securities electronically, has increased 8 fold, from 2.2 crore to 17.6 crore. The assets under management, or AUM, of the mutual fund industry, has also grown over six times, from Rs. 10.9 lakh crore to over Rs. 68 lakh crores. The number of mutual fund folios, which are accounts that hold one or more mutual fund schemes, has increased 5 times from 4.3 crore to 21.7 crore."
He added, "This obviously leads us to believe that investors are looking to the capital markets to park their savings for the long term."
Bhatia also quoted numbers to show how India is "standout exception" in the primary issuance space.
He said, "With only three per cent of global GDP, India led with a 30% share of all IPOs and raised 12% of the globe's IPO money in the first three quarters of 2024. The Economist has called the Indian stock market as the "largest-ever experiment in participatory capitalism""
The trend continues to this year. While around Rs. 1.97 lac crore was raised through the primary market in FY24, the funds raised in current financial year has already crossed Rs. 2 lac crores till September.
Bhatia said, "As more money and small savings enters our capital market, it is important that promoters, directors and senior management of the listed entities discharge their roles and responsibilities to ensure efficient capital formation in the securities market. There is, therefore, a shared responsibility of stakeholders including SEBI to ensure that markets are transparent."
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